Scott, Mississippi
April 9, 2007
Delta and Pine Land
Company (NYSE:DLP) (“D&PL” or the “Company”), a leading
commercial breeder, producer and marketer of cotton planting
seed, today announced results for the second quarter and
six-month period ended February 28, 2007.
Second Quarter Results
Net loss for the 2007 second
quarter was $0.06 per diluted share, compared to last year’s
second quarter net income of $0.40 per diluted share. The second
quarter net loss includes charges of $0.02 per diluted share
related to the proposed merger with Monsanto. The prior year
second quarter included $0.01 per diluted share in
Pharmacia/Monsanto litigation expenses.
Revenues were $45.0 million in the
2007 second quarter, compared to $115.0 million recorded in the
year-ago quarter. The revenue decrease was largely attributable
to lower domestic sales volumes, offset by increased revenues
from the International division, primarily in Brazil, which
continues to benefit from the introduction of transgenic cotton
varieties and higher acreage, as it did in the first quarter.
Domestic sales volumes were lower as a result of customer
indecision related to planting intentions, as higher corn prices
have increased the number of anticipated acres planted to corn.
The loss for the quarter was mitigated by lower operating
expenses, compared to the prior year quarter, primarily due to
reduced legal fees associated with various arbitration
proceedings with Monsanto that were either dismissed or stayed
pending the proposed merger.
After charges of $0.08 per diluted
share related to the proposed merger with Monsanto, net loss for
the 2007 six-month period was $0.35 per diluted share, compared
to net income of $0.14 per diluted share for the same period
last year. Net income in 2006 included a reduction of $0.03 per
diluted share for Pharmacia/Monsanto litigation expenses for the
six-month period.
Revenues for the 2007 six-month
period were $57.9 million, compared to $124.8 million in the
prior year. As previously indicated, the revenue decrease was
primarily attributable to lower domestic sales volumes,
partially offset by higher international sales in South America.
South America sales volumes benefited primarily from the
introduction of transgenic cotton varieties in Brazil as well as
an increase in Brazilian cotton acreage. The loss for the
six-month period was partially mitigated by lower operating
expenses, compared to the prior year period, largely due to
reduced legal fees associated with various arbitration
proceedings with Monsanto that were either dismissed or stayed
pending the proposed merger.
Subsequent to the issuance of the
Company’s 2007 first quarter consolidated financial statements,
the Company recorded a correction to such previously-issued
financial statements relating to a misstatement of a marketing
accrual. The correction of approximately $1.3 million ($800,000
after taxes) was not material to the Company’s consolidated
financial position or results of operations for the previous
quarter ended November 30, 2006. This correction does not impact
the year-to-date results.
Revised 2007 Earnings Guidance
For the fiscal year 2007, assuming
that cotton acreage planted declines 21% as now forecasted by
the U.S. Department of Agriculture (“USDA”) in its March 31
Planting Intentions Report and the Company maintains its market
share and product sales mix, D&PL expects earnings per diluted
share of $0.53 to $0.63, after charges of $0.26 per diluted
share related to its proposed merger with Monsanto. The
previously issued fiscal 2007 guidance had anticipated that
planted cotton acreage would be consistent with the prior year.
D&PL provides guidance based on an estimate of U.S. cotton
acreage issued by the USDA. For illustrative purposes, for every
500,000 acre decrease in planted cotton acreage in states east
of Texas, the Company estimates that its earnings could be
reduced by as much as $0.12 to $0.14 per diluted share.
Tom Jagodinski, President and
Chief Executive Officer, said: “While the short-term forecast
calls for U.S. cotton acreage to decline as a result of the
increase in acreage planted to other crops, mainly corn, we
believe that farmers will rely more than ever on our leading
products for superior yield, consistency and reliability. Our
farmer customers are in a period of uncertainty regarding
commodity prices, the upcoming U.S. Farm bill, and international
trade negotiations. Despite the fluctuating environment, we will
continue to invest, as we have for over 95 years, in the
necessary research and development of future varieties and
technologies to bring increased value to our farmer customers.
With respect to the pending merger with Monsanto we continue to
work with Monsanto on completing the regulatory review process
in order to obtain U.S. Department of Justice clearance to
complete the merger.”
Delta and Pine Land Company is
a leading commercial breeder, producer and marketer of cotton
planting seed. Headquartered in Scott, Mississippi, with
multiple offices in eight states and facilities in several
foreign countries, D&PL also breeds, produces and markets
soybean planting seed in the U.S. |
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